New health care organizations offer reward, risk

Tina Behar, a medical assistant with San Diego Independent ACO, draws blood from patient Richard Dacy, 75, during a diabetic wellness exam at one of the organization's offices in Spring Valley. Dr. Bryan Fox, pictured in the background, is one of 30 doctors participating in the new accountable care organization, which seeks to lower treatment costs, while maintaining quality, for Medicare patients.
— Nelvin C. Cepeda

Tina Behar, a medical assistant with San Diego Independent ACO, draws blood from patient Richard Dacy, 75, during a diabetic wellness exam at one of the organization's offices in Spring Valley. Dr. Bryan Fox, pictured in the background, is one of 30 doctors participating in the new accountable care organization, which seeks to lower treatment costs, while maintaining quality, for Medicare patients.
— Nelvin C. Cepeda

“At this time I cannot tell our board how the ACO is doing financially, but my expectation is that, in mid-February I will have a much better picture,” Fleury said.

Others are not so far along.

Standing in a small office in Spring Valley, Dr. Venu Prabaker is visibly excited at the prospect of getting a bonus for doing everything he, and his fellow doctors, can to keep people well.

“Every emergency room visit we can prevent is saving the system something like $16,000. Avoiding a hospital admission is saving more like $30,000,” said Prabaker, who is part of the San Diego Independent ACO.

Preventing admissions, he said, is a matter of closely following up with patients to make sure they are taking the correct medications at the right times and that they are coming in for regular checkups to catch new problems before they grow.

The group would split any savings with the government 50/50 and has the potential to earn up to $2.5 million in a year. Unlike pioneer ACOs, which get a 60/40 split, regular ACOs agree to receive a smaller share of the savings in exchange for receiving no penalty in the first two years of the three-year program.

Of course, one easy way to reduce expenditures per Medicare beneficiary is to simply deny treatment. But under the ACO program, doing so would be counterproductive.

The program includes a total of 33 performance measures that range from a patient’s opinion of the care their doctor provides to how well their blood pressure is controlled.

If organizations like San Diego Independent don’t meet the quality thresholds, they will get no bonus even if they do manage to shrink total Medicare billings.

Dr. Bryan Fox, another physician leader in the new organization, said he believes it is possible to meet the guidelines and still save money. He said some commercial insurance companies already have similar programs.

“We already do this with our senior HMO and commercial programs. Now, not only will we save money, but we will also reap some financial benefit,” Fox said.

For all ACOs the risk/reward calculation includes upfront costs that must be borne by the health organization out-of-pocket.

For Sharp, that has meant adding a host of new programs like conducting a fall assessment for each assigned patient, and hiring additional care coordinators to help patients better manage chronic diseases like diabetes, Fleury said.

Most of those additional services, she said, are not covered by Medicare. Sharp has spent more than $400,000 in the first year, and expects to spend $5 million this year, on services tailored to meeting the quality requirements.

Fleury said she does not expect to get a final decision on whether Sharp has earned a bonus until July.

While she said the delay is frustrating, the executive added that it’s important to understand that Sharp is participating in a pilot program that, if successful, could change the way health care is delivered nationwide.

“We spent a lot of time evaluating whether we wanted to go forward with this. Medicare’s not sustainable. We all know that. We wanted to be part of the solution. My greatest hope is that we’ve at least covered the cost of our involvement,” she said.